Platinum Asset Management Limited

PTM Details

Funds Under Management for March 2018: Platinum Asset (Investment) Management Limited’s (ASX: PTM) stock rose 0.181% on April 13, 2018. At the end of March 2018, PTM’s Funds Under Management have slightly fallen to $27,245.9 million compared to $27,728.7 million at the end of February 2018. This is due to net outflows of $150m, with one large client that partly reduced their account by $234m, and other net inflows totaling $84m. Meanwhile, PTM had appointed Andrew Clifford, co-founder and Chief Investment Officer of the Platinum Group, to be the new Chief Executive Officer (Managing Director) effective from 1^st July 2018. On the other hand, PTM for the first half of FY18 reported 14.9% growth in the total revenue to $185.9 million.
 

1H 18 Financial Performance (Source: Company Reports)
 
The increase in revenue was driven by fee revenue, that rose up 6.95% to $166 million and other income (mostly investment-related), which was up 202% to $20 million. The rise in fee revenue was due to the cumulative effect of strong investment returns, net client inflows and additional performance fees earned during the 1H 2018. These had offset the negative impact caused by the reduction in Platinum Trust Funds/Platinum Global Fund fees, that was effective from 3^rd July 2017. For 1H 2018, net profit attributable to members was up by 7.08% to $102.2 million. However, the rise in profit was less than the increase in revenue, predominantly due to the inclusion of an employee incentive non-cash provision of $14.3 million, and a modest rise in other spending, mainly related to new product initiatives. As a result, PTM stock has fallen 32.2% in three months as on April 13, 2018 and is trading at a slightly high P/E. We give an “Expensive” recommendation on the stock at the current price of $ 5.530.
 

PTM Daily Chart (Source: Thomson Reuters)
 

Navigator Global Investments Limited

NGI Details
 
Acquisition of Lighthouse Investment Partners by US subsidiary: Navigator Global Investments Limited’s (ASX: NGI) stock has risen 8.12% in three months as on April 13, 2018. NGI’s United States subsidiary, Lighthouse Investment Partners, LLC has signed a definitive agreement with Mesirow Financial to acquire substantially all the assets of Mesirow Advanced Strategies (MAS), which is the multi-manager hedge fund division of Mesirow. The purchase consideration for the acquisition includes a deferred basis over an agreed number of years and will be dependent on the amount of assets which transition to Lighthouse. However, this transaction is subject to a number of customary closing conditions; and targets a mid-year closing. After the expected completion of the transaction, Mesirow Financial is expected to serve as a distribution partner to Lighthouse. Meanwhile, for 1H2018, NGI has reported the statutory net loss after tax of $26,763 million, which is a fall of 418% from the profit of corresponding period. On the other hand, the group’s Assets Under Management (AUM) for Quarter ended 31 March 2018 have been estimated to be USD 10.56 bn against USD 10.46 bn as at December 2017. As a result, the stock rose up 3.2% on April 13, 2018. Looking at the trading levels, we give a “Hold” recommendation on the stock at the current price of $ 3.860.
 

NGI Daily Chart (Source: Thomson Reuters)
 

Magellan Financial Group Limited

MFG Details

Net inflows of $648 million as at March 2018: Magellan Financial Group Limited’s (ASX: MFG) stock rose 2.3% on April 13, 2018 while the company in March experienced the net inflows of $648 million, which included net retail outflows of $20 million and net institutional inflows of $668 million. As at 29^th March 2018, the total Fund Under Management (FUM) is A$ 65,279 million compared to FUM of A$ 65,363 million as at 28^th February 2018; and included a rise in infrastructure and Australian Equities while global equities were down. On the other hand, MFG has announced the termination of its three-year partnership with Cricket Australia as the naming rights sponsor of the Australian Men’s Domestic Test Series. This move was at the back of the group staying away from any association with the cricket team based on recent conspiracy by the leadership of the team. However, in the first half of 2018, MFG completed the $1.57 billion initial public offering of the Magellan Global Trust, the largest closed end fund raising in Australian history. The company has recently announced two strategic acquisitions, Frontier Partners in the United States and Airlie Funds Management to strengthen its retail funds management business in Australia and add significant focus to its institutional distribution activities in North America. Meanwhile, MFG stock has fallen 16.8% in three months as on April 13, 2018 and still reflects a room for growth given its steady growth and long-term potential. We give a “Buy” recommendation on the stock at the current price of $ 22.710.
 

MFG Daily Chart (Source: Thomson Reuters)
 

Macquarie Group Limited

MQG Details
 
2H18 net profit contribution from operating groups to be down on 1H18: Macquarie Group Limited’s (ASX: MQG) stock has risen 12.3% in six months as on April 13, 2018 as the company has delivered satisfactory trading conditions in the December 2017 quarter. MQG’s annuity-style businesses’ (Macquarie Asset Management, Corporate and Asset Finance and Banking and Financial Services) combined December 2017 quarter’s net profit contribution had risen slightly against the December 2016 quarter. MQG’s capital markets facing businesses’ (Commodities and Global Markets and Macquarie Capital) combined December 2017 quarters’ net profit contribution had fallen down on the prior corresponding period primarily due to timing of income recognition associated with transportation and storage agreements within the Commodities and Global Markets business. Additionally, MQG expects the combined net profit contribution from operating groups for FY18 to be slightly up on the year FY17. For FY18, the Group’s result is expected to be up approximately 10 per cent on FY17. However, MQG expects 2H18 net profit contribution from operating groups to be down on 1H18; while in line with the half-year ended 31^st March 2017. Looking at the price levels and run-up, we give an “Expensive” recommendation on the stock at the current price of $ 104.210.
 

MQG Daily Chart (Source: Thomson Reuters)

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